Staff Report for the 2014 Article IV Consultation and Third Post-Program Monitoring Discussions—Informational Annex

Growth accelerated to 3.1 percent in 2013, driven by a positive net exports contribution. The broad policy direction is supportive of near term macroeconomic stability. The key challenge is to transition from stability into an acceleration of medium term growth. Uncertainty with respect to EU accession remains, and weighs on longer term prospects.


Growth accelerated to 3.1 percent in 2013, driven by a positive net exports contribution. The broad policy direction is supportive of near term macroeconomic stability. The key challenge is to transition from stability into an acceleration of medium term growth. Uncertainty with respect to EU accession remains, and weighs on longer term prospects.

Fund Relations

(As of June 9, 2014)

Missions. Article IV and third Post–Program Monitoring mission, Skopje, May 6–19th, 2014. Concluding statement is available at:

Staff team. Ivanna Vladkova Hollar (head), Marc Gerard, Marzie Taheri Sanjani, Gregorio Impavido (all EUR), Patrick Gitton (Resident Representative), and Gjorgji Nacevski (local economist).

Discussions. The staff team met Deputy Prime Minister and Minister of Finance Stavreski, National Bank Governor Bogov, other senior officials, and representatives of the banking, business, political and international communities.

Publication. The Macedonian authorities have indicated that they agree with publication of this staff report.

Membership Status: Joined 12/14/92; Article VIII

General Resources Account:

article image

SDR Department:

article image

Outstanding Purchases and Loans:

article image

Formerly Precautionary Credit Line (PCL)

Latest Financial Arrangements:

article image

Formerly PCL

Projected Payments to the Fund (Expectation Basis) 1

(SDR million; based on existing use of resources and present holdings of SDRs):

article image

Exchange Arrangement:

The currency of the FYR of Macedonia is the denar. The FYR of Macedonia maintains a managed floating exchange rate system with a de facto stabilized arrangement against the Euro. Households can transact through commercial banks or through foreign exchange bureaus that act as agents of banks; enterprises can transact through the banking system. The reserve requirement on foreign currency deposits is set at 13 percent, while that on FX-indexed denar deposits are set at 20 percent.

At end-May 2014, the official exchange rate was 45.3 denars per U.S. dollar and 61.65 denars per euro. The FYR of Macedonia has accepted the obligations of Article VIII, Sections 2, 3, and 4 with effect from June 19, 1998.

Article IV Consultations:

The first consultation with the FYR of Macedonia was concluded in August 1993. The last consultation was concluded on June 26, 2013 (IMF Country Report 13/178). The FYR Macedonia is on the standard 12-month Article IV consultation cycle, while Post-Program Monitoring is expected to take place every 6 months.

Table 1.

Technical Assistance since 2006

article image
article image
article image

Resident Representative The Fund has had a resident representative in Skopje since 1995. Mr. Patrick Gitton has held this position since August 2013.

Imf-World Bank Collaboration


The Bank and the Fund country teams on the Former Yugoslav Republic of Macedonia maintained close collaboration, seeking synergies and harmonizing policy recommendations. Close coordination has resulted in largely shared views of the economic situation in the country, particularly in the context of the latest Public Expenditure Policy Based Guarantee (PEPBG), for which the Fund provided an Assessment Letter in November 2012. The area of public financial management has been at the center of discussions over the last year, and the measures supported by the PEPBG on public finance management have benefited from the findings and recommendations of the recent IMF TA mission.

Key Areas of World Bank Involvement

  • The World Bank program in FYR Macedonia focuses on three pillars: (i) faster growth by improving competitiveness; (ii) more inclusive growth by strengthening employability and social protection, and continued improvement of social programs; and (iii) more sustainable resource use and an analysis of options for “greener” economic growth. Because FYR Macedonia’s future growth and development depends fundamentally on the pace of EU accession, virtually every intervention in the program is designed to help it prepare for the EU membership.

  • A series of two budget support operations (Competitiveness DPL) has been made available to the Government with the aim to improve the competitiveness of the economy to develop a stronger export-oriented enterprise sector. The first of these has been closed, while the second one has been approved, and disbursement is expected until the end of June, 2014.

  • The World Bank also provided recently two Policy Based Guarantees for two loans the Government contracted with commercial Banks, together in the amount of €255 million. The Policy Based Guarantees supported critical reforms needed to strengthened robustness of public financial management and help mitigate the impact of the euro zone turmoil.

  • The Real Estate Cadastre and Registration Project (US$26 million) is supporting the digitalization of cadastral maps and securing land and real estate titles. The Regional and Local Roads Program Support Project (US$105 million) is helping with the rehabilitation of the regional and local roads and provides institutional support to improve the management of roads. The World Bank finances the energy sector through the Electric Power Development Energy Community of South East Europe Project APL3 (US$44 million) to improve the transmission grid, including an interconnection with Serbia. Local development is assisted through the Municipal Services Improvement Project (US$75 million), which is helping to improve transparency, financial sustainability and delivery of targeted municipal services in selected municipalities. The World Bank is also active in the human development sector through the Conditional Cash Transfer Project (US$25 million), and the new Skills Development and Innovation Support Project (US$24).

Macedonia-Bank and Fund Planned Activities in Macrocritical Structural Reform Areas, June 2014-May 2015

article image

Statistical Issues

(As of June 9, 2014)

article image

Former Yugoslav Republic of Macedonia: Table of Common Indicators Required for Surveillance

(As of June 9, 2014)

article image

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Weighted interest rates on loans and deposits in domestic banks. Separately, data is submitted on the rates on central bank bills (policy rate) and treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments. Data including local governments is normally published annually but is also received on an ad-hoc basis during missions.

Currency and maturity composition is reported only on request.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA).

Reflects the assessment provided in the data ROSC or the Substantive Update (published on September 29, 2004, and based on the findings of the mission that took place during February 18 - March 3, 2004) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

Same as footnote 8, except referring to international standards concerning source data, assessment and validation of source data,, statistical techniques, assessment and alidation of intermediate data and statistical outputs, and revision studies.


When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.